Shifting of goalposts

The legislation passed by Congress on the civil nuclear deal has given rise to serious concerns over the shape of the final agreement.

ON December 9, the joint conference of the two chambers of the United States Congress, the House of Representatives and the Senate, passed the enabling legislation on Indo-U.S. civil nuclear cooperation titled `Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006', named after the outgoing Chairman of the House International Relations Committee. The joint conference committee produced a conference report `Background and need for legislation', on December 8, giving the necessary information and explanation about individual clauses in the legislation. After its passage by a majority vote of 330 to 59, the Bill was presented to President George W. Bush on December 13 for signing it into law.

The Henry Hyde Act is the reconciled version of the earlier independent versions framed by the two chambers, the House version H.R. 5682 and the Senate version S. 3709 as amended. H.R. 5682 was passed on July 26 by a majority vote of 359 to 68 and the latter version by the Senate on November 16 (by incorporating the amended text of S.3709 into H.R. 5682) by a majority vote, 85 to 12.

These versions were themselves substantially modified ones from the original (identical) short, one-page legislation moved by the Bush administration in March in both the chambers as H.R. 4974 and S. 2429 respectively. The original administration proposal, besides providing the relevant presidential waiver to enable a civil nuclear cooperation agreement with India under Section 123 of the U.S. AEA 1954 (hence called the `123-Agreement'), sought waiver from the normal congressional procedure as well.

Normally, for any agreement that exempts a recipient non-nuclear-weapons state (NNWS) such as India from full-scope safeguards (FSS), as required by Section 123 a (2) of the Atomic Energy Act (AEA) (Frontline, August 11), to come into force, a specific congressional vote of approval is required. The substantial changes incorporated into the legislation by the House and the Senate respectively were essentially to restore congressional oversight and the process of congressional approval.

There were four major differences between the Senate and the House versions of the Bill, which otherwise were similar in spirit and content. Besides requiring the President to make annual reports to Congress on various aspects concerning India, including fulfilling of the commitments made in the Joint Statement of President Bush and Prime Minister Manmohan Singh on July 18, 2005, the Senate version contained an additional requirement for the President to execute his waiver authority, an amendment known as the Harkin Amendment (Section 105(8) of the Senate version), that required the President to determine that India is "fully and actively participating in U.S. and international efforts to dissuade, sanction and contain Iran for its nuclear programme".

The other provisions relate to Sections 106 and 107 of the Senate version. Section 106 prohibits exports of equipment, material or technology related to uranium enrichment, spent fuel reprocessing or heavy water production unless used in a multilateral facility participating in a project approved by the International Atomic Energy Agency (IAEA) or in a facility participating in a bilateral or multilateral project to develop a proliferation-resistant fuel cycle. Sections 107(1) & (2) relate to putting in place an appropriate end-use monitoring mechanism of exports of nuclear goods licensed by the U.S. Nuclear Regulatory Commission (NRC) or the U.S. Department of Energy (DOE) and of nuclear dual-use items from the Commerce Control List (CCL) licensed by the U.S. Department of Commerce (DOC). Section 107(3) sought to put in a system of additional safeguards in case the IAEA was unable to implement the safeguards effectively for whatever reason.

Both the versions, particularly the Senate version, came in for considerable criticism in India, for including conditions that seemed to go beyond what was agreed upon in the Joint Statement. In the opinion of both the Ministry of External Affairs and the Department of Atomic Energy (DAE), as well as media commentators, bringing in these additional elements was tantamount to "shifting of goalposts" from those spelt out in the Joint Statement (Frontline, August 11).

Although in operative terms there was no real "shifting of goalposts", the language of the two Bills gave rise to serious concerns over the shape the final `123-Agreement' would take. This was chiefly because of the many "non-binding" provisions in the Bills, particularly those that had implications for India's sovereignty and independent foreign policy, specifically with regard to Iran, and the curtailed scope of the cooperation envisaged as against the "full civil nuclear energy cooperation" indicated in the July 18 statement.

In response to these criticisms, the Prime Minister had made a statement in the Rajya Sabha on August 17 wherein he said: "[W]e will not accept any conditions that go beyond the parameters of the July 18, 2005, Joint Statement and the March 2, 2006, Separation Plan, agreed to between India and United States. If, in their final form, the U.S. legislation or the adapted NSG Guidelines impose extraneous conditions on India, the government will draw the necessary conclusions, consistent with the commitments I have made to the Parliament."

It should be borne in mind that the finally enacted legislation, the Hyde Act, is only an enabling law. What are relevant are the `123-Agreement', the nature of the India-specific changes in the (export) Guidelines of the 45-member Nuclear Suppliers Group (NSG), and the India-specific nuclear safeguards and the broader Additional Protocol that India must conclude with the IAEA. In this context, the Act is important inasmuch as it will form the basis for the 123-Agreement and the negotiations at the NSG.

The reaction of the MEA to the text of the final consolidated Bill was mixed. Its cautious welcome a day before its final passage suggests that the Indian government does not seem to be fully satisfied with the text of the legislation. It said: "The enactment of the waiver has wider implications for India's access to international cooperation in civilian nuclear energy and is, therefore, of historic significance... . The government also notes that this draft legislation contains certain extraneous and prescriptive provisions. As the Prime Minister stated in Parliament, no legislation enacted in a foreign country can take away from us the sovereign right to conduct foreign policy determined solely by our national interests... . We expect the [`123-Agreement'] to adhere to the July 18 Joint Statement and the Separation Plan." The statement, however, did not elaborate on the nature of the "extraneous and prescriptive provisions" that the MEA is not happy with.

In his August statement, the Prime Minister had also chosen to respond to specific criticisms that were being raised by media commentators, the scientific community and political parties. Actually, many of them were not relevant to the operative parts of the Bills and were, therefore, somewhat misplaced. Two among the unrelated ones, which have been extensively commented upon, include end-use verification or monitoring of goods exported (Section 107 of the Senate version) and termination of the waiver if India detonates a nuclear device (Section 110 of the Senate version). Of the remaining, one was concerned with fuel supply assurances and, therefore, had to do with the `123-Agreement'.

The chief criticisms directly relevant to the Bills were those concerning the following issues: (1) full civil nuclear energy cooperation; (2) sequencing of mutual commitments (in the Joint Statement); (3) annual certification by the U.S. President; (4) "fall-back" safeguard measures in case of the IAEA's inability to implement the safeguards effectively; and, (5) the requirement that the "India-specific" additional protocol to be negotiated with the IAEA should be based on the Model Protocol INFCIRC/540. These Indian concerns have been addressed in the Hyde Act version by diluting the provision or changing the language, but obviously not to the satisfaction of the government and hence the cautious reaction. Some scientists have also reacted negatively to the legislation in its present form.

"The Act totally negates all the assurances given by the Prime Minister to both Houses of Parliament. I do not see how our government or the U.S. administration will be able to correct the situation through the 123-Agreement, especially since this agreement also will have to be approved by the two Houses of the U.S. Congress," said A. Gopalakrishnan, former Chairman of the Atomic Energy Regulatory Board. Seven former scientists of the DAE establishment, including Gopalakrishnan and three former Chairmen of the Atomic Energy Commission, who met the Prime Minister subsequent to his August 17 statement, have issued a statement detailing their apprehensions, specifically on three aspects of the Act: denial of full civilian cooperation, India's participation in international efforts on non-proliferation through initiatives such as the Proliferation Security Initiative, and impact on the domestic strategic programme.

Iran continues to figure in the final Act as one of the prescriptive provisions, as a statement of policy as well as a requirement of presidential reporting to Congress. Instead of the presidential determination sought by the Harkin amendment, introduced on November 16 in the Senate version, the final Act only mandates an assessment by the President to Congress under Section 104(g)(2) of "whether India is fully and actively participating in the U.S. and international efforts to dissuade, isolate, and, if necessary, sanction and contain Iran... .etc. etc."

If the assessment is not affirmative, then it requires the President to describe the measures the U.S. has taken and will take to secure India's full and active participation and India's response to them. While this is not a binding requirement, it does go against the spirit of the July 18 statement and the assurance given by the Prime Minister on August 17 that any prescriptive provision in this regard was unacceptable.

A justified criticism of the earlier versions of the Bills was on the sequencing of the safeguards agreement (on nuclear facilities voluntarily declared civilian by India) with the IAEA. These Bills required that the safeguards arrangement should have entered into force (or been concluded) before the finalisation of the 123-Agreement. This would have made the safeguards binding on India even if the 123-Agreement was not concluded for some reason. The final Act has taken care of this concern by rewording the Bill only to require that all legal steps prior to the final signature on the safeguards document be completed.

An annual certification of compliance by India with commitments and obligations under the agreement, as required under Section 108 (b)(4)(A) of the Senate version of the Bill, would have added an element of uncertainty and subjectivity in the implementation of the cooperation agreement requiring effectively an annual renewal of the waiver. However, the final Act, following concerns and criticisms expressed by India, does away with that. Now only an "assessment" of compliance in the annual `Implementation and Compliance Report' is required as per Section 104(g)(2) of the Hyde Act.

The inclusion of the end-use monitoring clause in the Senate version (Section 107 (1)&(2)), which analysts consider to be a major issue, was actually superfluous because end-use verification and monitoring is part of the export control policy of the U.S. and the procedures have been further strengthened under the Indo-U.S. Next Steps in Strategic Partnership (NSSP) since 2004. In that sense, this need not have figured in the earlier Bill or the Hyde Act, where it appears in a reworded form as Section 104(d)(5).

However, the provision for a second layer of safeguards has been a matter of controversy. It is perceived as being highly intrusive and as a way for U.S. officials to get access to the innards of the Indian programme. According to the conferees' background report, "fall-back" measures may become necessary because of financial or personal strains in the IAEA and are not intended to be any more intrusive than standard IAEA procedures. In fact, such provisions have been standard in the bilateral agreements of the U.S. with other countries in the past.

But, more importantly, "fall back" safeguards were included in the NSG guidelines after the decision by the NSG plenary in Oslo in June 2005 (before the Indo-U.S. agreement), but NSG members notified the change to the IAEA (as INFCIRC/254/Rev.8/Pt.1) only in March 2006. Thus, these provisions have not been introduced with the potential exports to India, an NNWS, in view. Significantly, Russia and Kazakhstan do not figure among the NSG members who have notified the changed guidelines in their respective export control systems, and these are potential exporters of nuclear material and technology to India if there are apprehensions about the fall-back mechanisms envisaged by the U.S.

One major misconception that keeps cropping up in various commentaries concerns the Additional Protocol (over and above the safeguards agreement) that India must negotiate with the IAEA following the commitment it has given in the July 18 statement. According to Section 110 of the final Act (or Section 113 of the Senate version), the Additional Protocol that India concludes with the IAEA should "be based on the Model Additional Protocol as set forth in the IAEA document INFCIRC/540". The widespread misconception is that INFCIRC/540 is meant for NNWSs only and, despite having recognised that India has a strategic nuclear programme and having allowed a civil-military separation of its facilities, it is being treated like an NNWS by the U.S. Act and the Protocol provisions will be highly intrusive.

What needs to be understood is that INFCIRC/540 is a model document based on which the IAEA negotiates and concludes the Additional Protocol with a particular state. As Susan Burk, the U.S. Assistant Secretary for Non-Proliferation, stated in her congressional testimony on January 29, 2004, "NNWS must incorporate all the measures set forth in the Model Additional Protocol... . NWS and countries not party to the NPT, however, are free to choose ... or limit the application of the provisions of the Model Protocol, since they have not made a commitment to place all nuclear activities under safeguards" (emphasis added).

Explicit provision in the Act as well as in the `123-Agreement' for the termination of the presidential waiver and the cooperation agreement in the event of a nuclear test by India is also being perceived as an infringement on India's sovereignty and autonomy in its strategic policy decisions.

The Prime Minister had said in August: "Our position on this is unambiguous. The U.S. has been intimated that reference to nuclear detonation in the India-U.S. Bilateral Nuclear Cooperation Agreement as a condition for future cooperation is not acceptable to us. We are not prepared to go beyond a unilateral voluntary moratorium on nuclear testing as indicated in the July Statement."

The fact of the matter is that Section 129 (1)(A) of the AEA requires the termination of the agreement if India were to test and, as required by the same law, India will have to return material and equipment received pursuant to the Agreement. It is only to be expected that this aspect of U.S. law will figure in the bilateral nuclear agreement in some form.

The final Act too states this premise very clearly under Section 106 irrespective of the circumstances that may have led to the test. Regardless of whether a specific provision for termination figures in the Agreement or not, Section 129 will kick in if India conducts a test.

"The conferees," the background note says, giving the rationale for its inclusion, "intend this section to make absolutely clear a point that already follows from Section 129 of the AEA. This title affords no waiver from Section 129 for an Indian nuclear test after July 18, 2005." That such a law exists should have been known even when India began its negotiations. The negotiators would now do well to include caveats in the 123-Agreement, such as the national security clause or the circumstance obtained following tests by other countries.

The issue of fuel supply assurances, agreed to in March, is of relevance here. The conference report makes it clear that assurances cannot be given for fuel supply disruption owing to abrogation of the agreement, say, in the wake of a test by India. Such assurances are meant only to take care of market failures and similar reasons. But it is not inconceivable that fuel supply could be disrupted owing to new pieces of legislation that prevent such transfers, as it happened in the case of Tarapur. The 123-Agreement that India concludes must, therefore, be carefully negotiated to take care of such exigencies (Frontline, August 11) along with a force majeure clause in the safeguards agreement as well, which otherwise is meant to be in perpetuity.

A condition viewed seriously by the Indian government and scientists is the restrictions imposed by the Bills on the scope of the cooperation, as against "full civil nuclear cooperation" envisaged in the Joint Statement. This is the restriction on transfers of equipment and technology related to uranium enrichment, spent fuel reprocessing and heavy water production - the Sensitive Nuclear Technologies or SNTs - imposed by Section 106 of the Senate version. The final Act carries the same restriction under Section 104(d)(4). At the April 5 Senate hearings, U.S. Secretary of State Condoleezza Rice testified: "The U.S. does not foresee transferring heavy water production equipment or technology to India...There has been no discussion of possible transfers of enrichment and reprocessing technology to India or any Indian request for such technology" (Frontline, August 11).

The Conference Report clarifies the issue as follows: "Under the AEA, such cooperation is not restricted, but agreements for cooperation must specify if such cooperation is to take place... The conferees note that all but one currently active 123-Agreement [with Australia] specifically prohibit such cooperation... The conferees intend that, should any such cooperation with India be contemplated, either the original agreement for cooperation would specify that such cooperation is authorised or a subsequently amended agreement would be submitted to Congress. In either circumstance, existing congressional prerogatives to review and approve such cooperation would be maintained. The conferees note that the administration has already stipulated that `full civil nuclear cooperation', ... will not include enrichment or reprocessing technology." This may be a matter for subsequent negotiations but given that India has not declared any reprocessing or enrichment plant as civil, and has also not evinced interest in such technologies, the issue is at present only of academic interest.

But the really serious issue concerns the reprocessing of spent fuel arising out of imported uranium. The Tarapur experience (spent fuel from over 30 years of reactor operation lies accumulated) suggests that this should the foremost issue that should be resolved before concluding the 123-Agreement. According to Section 123a(7) of the AEA, reprocessing of spent fuel arising out of fuel imported from the U.S. cannot be done without the approval of the U.S.

The U.S is yet to give this approval for Tarapur fuel nor is it willing to take back the fuel. Also from the perspective of our programme, it is important that the DAE is able to reprocess spent fuel from safeguarded reactors to fuel safeguarded breeder reactors.

According to the AEA, such reprocessing will be based on a bilateral "subsequent arrangement" to be entered into under Section 131(f) of the AEA. But there are indications that the U.S may be amenable to such an arrangement. The Under Secretary of State Nicholas Burns said that the issue of spent fuel was "ahead of us" in future negotiations.